UPDATE 1-Indonesia state pension funds to boost buying of battered shares
(Adds details, paring of day's losses)
JAKARTA Aug 20 (Reuters) - Indonesia's two main state pension funds said on Tuesday they would increase their purchases of local stocks, and such purchases appeared to be already under way, paring losses for battered share prices.
The benchmark Jakarta share index on Monday tumbled 5.6 percent and on Tuesday, it fell another 5.8 percent before losses were reduced - thanks partly, analysts said, to pension fund purchases.
At 0845 GMT Tuesday, the index was down 3.7 percent.
The plunge in Indonesian shares stemmed from a wide current account deficit, a squeeze on bank lending and broader slump in emerging markets on worries about the impact of a tighter U.S. monetary environment.
PT Tabungan dan Asuransi Pensiun (Taspen) and the larger PT Jaminan Sosial Tenaga Kerja (Jamsostek) have said they have an estimated combined $800 million to invest this year.
"Jamsostek will raise its (portfolio) allocation in stocks. We see no fundamental issues for listed companies and stock prices are considered cheap now," Elvyn Masassya, the chief executive officer of Jamsostek, told Reuters.
Some 60-65 percent of share allocations by the two funds are in state-owned enterprises. Several large SOEs are listed in Jakarta.
HEAVILY IN BONDS
Jamsostek, the largest state owned pension fund, manages 145 trillion rupiah ($13.55 billion). At the end of July, about 46 percent of that was in bonds and 22 percent in stocks.
It invests heavily in state-owned enterprises, focusing on infrastructure and banks.
The civil servant pension fund Taspen also puts priority on state-owned companies.
Taspen CEO Iqbal Latanro told Reuters the fund has two functions. "One is as a buffer if there is a significant outflow. The second is (to buy)... when the price hits bottom," he said.
Taspen manages 110 trillion rupiah, of which 70 percent has been allocated to long-term government notes and 8 percent in equity market.
Its preferred share market sectors are manufacturing, property and banking. Among its investments are telecommunication provider PT Telkom, toll operator Jasa Marga, utility firm Perusahaan Gas Negara and seven state-controlled lenders. ($1 = 10,700 rupiah) (Reporting by Fathiya Dahrul and Andjarsari Paramaditha; Editing by Jonathan Thatcher and Richard Borsuk)
- Tearful Thai PM urges protesters to take part in election
- Google bus blocked in San Francisco gentrification protest
- North Korea's 'reign of terror' worries South's leader
- Chinese hackers spied on Europeans before G20 meeting: researcher
- Putin dissolves state news agency, tightens grip on Russia media